Hi-tech British exports are still hobbled by red tape

When Kostya Novoselov and Andre Geim developed graphene, the “material of tomorrow”, in 2010, they were using scientific instruments manufactured by London-based Cryogenic.

Founded in 1992 by Jeremy Good, the company specialises in precision instruments for physicists dealing with high magnetic fields and low temperatures. The £10m-turnover business exports 95pc of its products, and 85pc of its customers are from outside Europe.

However, despite the Government’s commitment to increasing net exports to £1 trillion by 2020, Good’s international growth ambitions have been curtailed by form-filling, visa issues and EU bureaucracy.

Cryogenic employs 75 people in the UK, a third of whom are scientists and PhDs. The company’s ability to recruit and retain top talent is crucial: without innovation Cryogenic would be unable to keep up with its hi-tech material engineering and research customers.

“We need the best people from all over the world to come to work for us,” says Good. “But you can’t imagine the trouble we’ve had trying to secure visas for staff.”

“We had to pay for him to work for us back in the Ukraine, and he would drop in on flying visits to London while we waited for his visa to be approved,” explains Good. “It was a nightmare.”

The issues continued when the time came to renew the visa. Despite the company making the application in good time, the UK Border Agency office said that only emergency applications were being granted.

“Technically, this meant he ought to leave,” says Good. “But his wife was here, his child was in school. It was very nerve-racking.”

Legally, Good had to stop paying the scientist until the new visa had been granted. He sought legal advice and was told that although continuing to employ the scientist was technically an imprisonable offence, no one had ever been prosecuted.

“I was incensed that I was breaking the law, but I couldn’t stop paying him just because of bureaucracy.

Three weeks later I got the call saying that he could stay, but the whole experience was so demoralising for the guy.”

Good has lost key staff because of the amount of paperwork required for non-nationals to stay in the UK.

A specialist in atomic force microscopy, who had worked at Cambridge University for many years, recently decided to move to Germany. “He was just fed up,” says Good.

Cryogenic has not only lost good people because of red tape, but it is also missing out on crucial revenue.

“Customers want to come and see the equipment before they buy it. We’ve had cases where we’ve had to wait six months for a visa.

It’s hugely damaging to cash flow to have £250,000 worth of equipment sitting in the factory while we wait for the visa application to go through.”

Even once Cryogenic’s customers reach British soil, their experiences with border control can be extremely negative.

“One customer from Japan who is 80 years old was made to stand and wait for four hours. He’d spent £1m with us and that’s how he was treated. It was outrageous.”

Good claims Cryogenic has lost out on up to 25pc of turnover because of immigration and visa issues.

When visas aren’t granted to customers, Cryogenic has to send a team out to the customer’s country to train scientists on the new equipment, at substantial cost to Cryogenic.

Last month, the UK’s science minister, David Willetts, set out the Government’s ambition for British science to be the best in the world, announcing a £300m fund to create jobs in the sector and spur innovation.

“Investment in science is a crucial part of this Government’s long-term economic plan,” he said. “It’s about investing in our future, helping grow new industries and create more jobs – and that will mean more financial security for people across the country.”

According to the Government, every £1 spent on scientific research in Britain generates 50p for the wider economy every single year afterwards.

Cryogenic, as one of only three global companies offering these particular specialised research products, should be a priority for the Government.

“But we’ve reached a point that we are considering moving some of our operations elsewhere,” said Good. “We must sell around the world, but red tape is making this very challenging.”

New EU regulation governing procurement has also become a challenge for Cryogenic. “If universities in Europe want to buy equipment worth over €200,000 (£165,000), they have to undertake a bidding procedure,” he explains.

“This can be extremely complicated for smaller companies, involving hundreds of pages of documentation.”

Cryogenic has to bid for the contracts in the language of the university’s country of origin, which has increased the cost of doing business in Europe.

“They want the whole safety policy and the description of the product in the buyer’s language, which means hiring an agent. It’s a nonsense. It’s now far easier for me to sell to Japan or Brazil than to France.”

Good’s travails don’t end there. All products that are sold in Europe must have the CE mark, which proves European safety directives have been met.

Obtaining the CE mark can be costly. Many companies outside the EU will only invest in CE marking for high-value products.

“We’ve tried to buy hi-tech equipment from the US that cost $10,000,” says Good. “But it was too low value for the company to EC mark, so we couldn’t have it.

In Japan, there are companies making state-of-the-art equipment you can’t get anywhere else. The CE rules are effectively a restriction on trade.”

Good is calling for a wholesale review of the CE marking process to allow for exceptions. “The regulation is supposed to protect EU industry and make it safer, but it’s just holding hi-tech companies back,” he says.

But, for Cryogenic, the immigration challenge remains far more pressing. The company is aiming for a £12m turnover this year, but if its customers were granted visas in a timely fashion, that figure could be higher.

“Let’s make the visa application work for businesses,” says Good. “It’s important to protect our borders from abuse, but we don’t have to throw the baby out with the bath water.

“The Government says the UK is open for business,” he continues. “I say, prove it.”

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